To qualify for the pooled trust exception, to the extent that amounts remaining in
the individual’s account upon the death of the individual are not retained by the
trust, the trust must contain specific language providing that the trust will pay
to the State(s) from such remaining amounts in the account an amount equal to the
total amount of medical assistance paid on behalf of the individual under the State
Medicaid plan(s). To the extent that the trust does not retain the funds in the account,
the State(s) must be listed as the first payee(s) and have priority over payment of
other debts and administrative expenses, except as listed in SI 01120.203E in this section.
The trust must provide reimbursement to any State(s) that has provided medical assistance
under the State Medicaid plan(s) and not be limited to any particular State(s). For
example, it is not compliant for a Medicaid-payback provision to refer simply to “Maryland”
or “Maine and Vermont”. However, it is compliant for a Medicaid-payback provision
to refer to “the State”, assuming that the trust has not defined that term to mean
only a particular State(s). Medicaid payback also cannot be limited to any particular
period of time; for example, payback cannot be limited to the period after establishment
of the trust.
If the trust does not have sufficient funds upon the beneficiary’s death to reimburse
in full each State that provided medical assistance, the trust may reimburse the States
on a pro-rata or proportional basis.
Merely labeling the trust as a Medicaid payback trust, an OBRA 1993 payback
trust, a trust established in accordance with 42 U.S.C. § 1396p, or a Medicaid Qualifying Trust (MQT) is not sufficient to meet the requirements for this exception. The trust must contain
specific payback language whose effect is consistent with the requirements described
above. An oral trust cannot meet this requirement.